United, US Airways, JetBlue post losses on fuel woes
Three major U.S. airlines reported losses on Tuesday, sapped by soaring fuel costs, but stocks in the sector rose sharply as investors hoped falling crude oil prices signaled relief ahead.
United Airlines parent UAL Corp (UAUA.O: Quote, Profile, Research, Stock Buzz), US Airways Group Inc (LCC.N: Quote, Profile, Research, Stock Buzz) and JetBlue Airways Corp (JBLU.O: Quote, Profile, Research, Stock Buzz) all reported second-quarter losses — with UAL alone suffering a quarterly loss of $2.7 billion. All three blamed skyrocketing fuel costs that have forced layoffs and capacity cuts.
Asked why shares were broadly higher, Calyon Securities analyst Ray Neidl said: “Probably, 80-90 percent (of it is) oil being down.”
UAL shares closed up 69 percent, or $3.42, to $8.41 on Nasdaq. US Airways shares jumped 59 percent, or $1.58, to $4.27 on the New York Stock Exchange. JetBlue shares were up 15.7 percent, or 61 cents, to $4.50 on Nasdaq.
“Airlines stocks are totally sensitized to what happens to oil prices, for the very simple reason that fuel costs now exceed labor costs,” said Julius Maldutis, president of consulting firm Aviation Dynamics.
Oil prices fell $5 a barrel to a six-week low Tuesday as dealers anticipated a tropical storm moving over the Gulf of Mexico would miss most major oil and gas installations offshore quick payday loan. The losses come after the biggest weekly price decline in oil’s history last week, when $17 was chopped off the cost of a barrel.
UAL
UAL said its net loss totaled $2.73 billion, or $21.47 per share, compared with a profit of $274 million, or $1.83 per share, a year earlier. Excluding one-time charges, UAL lost $1.19 per share.
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